Summit Notebook

Revealed: Why ‘Conquerors of the Skies’ are homing on Wyoming

There must be something about Wyoming at this time of year.

Several participants at the Reuters Aerospace and Defense Summit held in Washington this week said they were heading out West — but declined to say what was taking them so far from hard-nosed airline investors and Pentagon accountants.

But the aviation head honchos tend to shy away from talking about it.

“I like Wyoming very much in the beginning of fall — a beautiful area,” was all we could get from one multinational corporation chief.

“It’s a meeting,” growled the head of a top engine maker.

To explain the rush, industry officials familiar with the matter suggested the curious should look no further than a venerable club known as the “Conquistadores del Cielo.”

Each year, according to people who have attended the event in the past, the ‘conquerors of the skies’ temporarily set aside their differences in one of the world’s most cut-throat industries and head to the Cowboy State for informal bonding.

L-3 CEO Strianese finds crawling around airplanes fun

Michael Strianese, President and CEO of L-3 Communications Holdings Inc., is a roll up the sleeves kind of guy who likes nothing better than a close-up look at airplanes and wiring and sensors. And he’s not even an engineer.

“What do I like to do? I like to get down on the factory floor with the guys and crawl around airplanes and look at wiring and figure out how things work. So for somebody with a finance background, I think that surprises people,” he said at the Reuters Aerospace and Defense Summit.

“I think what might surprise people is I spend a lot of time developing some of the technical solutions on our unmanned systems that we developed internally over the last couple of years,” he said.

The company CEO has had a personal hand in the systems for the Viking 400, Mobius and Project Liberty aircraft.

It might not be fun for an engineer to come into the company’s chief financial officer’s office and deal with numbers and paper — “It’s a lot more fun to crawl around with wires and sensors and things and watch how things work,” Strianese says.

“I just don’t run the company from sitting at a desk in New York City, I really do like to get out and touch and feel the products and meet the people,” he said.  

“And I think our folks that do the work like seeing some of the corporate folks around and recognize that we’re regular people too.”

Divorced defense giants reunited in Reuters office

It might well have been the business divorce of the year, but it seems there are no hard feelings between the heads of defense contractors Northrop Grumman and jilted European partner EADS.

The companies had been bidding together to challenge Boeing for a deal worth up to $50 billion to supply aerial tankers to the Air Force. But Northrop pulled out in March leaving EADS, the Franco-German parent company of Airbus, to bid alone.

The two companies’ chief executives crossed paths in the Reuters Washington bureau as they took consecutive speaker spots at an annual Reuters symposium on the aerospace industry.

Frenchman Louis Gallois, the chief executive of EADS, put his arm around Northrop’s Wes Bush and said “Just married!”

It was a light moment of relief in one of the most bitterly fought defense procurement sagas of recent decades.

But Bush is not laughing his way back to the altar yet.

“I will tell you there is not a single moment since we made that decison that I have felt any regret,” Bush said at the Reuters Aerospace and Defense Summit.

Northrop Grumman chief sees message in moving HQ to East Coast

Northrop Grumman CEO and President Wes Bush (no relation to the former president) says there’s a message in moving the company headquarters across the country to a suburb of  Washington from Los Angeles.

“I absolutely believe it’s something that we need to do and will be very good for our company,” Bush said at a Reuters Aerospace and Defense Summit.

“To be direct about it, this is one of the smaller operations that we’re moving in the company. We say yes it’s a very important operation, it’s the corporate headquarters, but it’s several hundred people out of 120,000 people in the corporation.”

The company’s headquarters will move to Falls Church, Virginia, with the goal of starting operations at its new location in summer 2011. Northrop has gone through the process of identifying who will move and which jobs will be filled with local hires, Bush said. 

“We’re a company that manages programs and so we’re running this like a program.”

The initial announcement about moving to the East Coast from the West Coast came as a surprise to many, but Bush, who took the helm of the firm in January, says it did get a certain message across.

“I’m not sure I’d measure it in popularity,” he said.

Lockheed Martin bracing for a new reality

Lockheed Martin CEO Robert Stevens says despite cost cutting, the defense industry will survive based on new global security needs and adds that Lockheed’s portfolio is well positioned for change.

EADS chief longs for airplane that is no longer

What would you guess is the airplane that the head of  the company that produces the Airbus longs for?

Think fast and past.

“Concorde,” Louis Gallois, EADS Chairman and CEO, says without hesitation. “It’s a dream.”

The supersonic plane, built in some of the factories that now produce the bulky Airbus A380 super jumbo, made its last commercial flight from New York to London on Oct. 24, 2003.

The supersonic trip would typically take about 3-1/2 hours, cutting the travel time in about half for busy company executives.

“I am a fan of supersonic airplanes. I have taken the Concorde three or four times, it was a fantastic airplane,” Gallois says at the Reuters Aerospace and Defense Summit.

“But, you know, that is the past. And I regret that our industry is no longer interested in supersonic airplanes, we are not working on it, but it’s a personal regret,” he said with a touch of wistfulness.

Boeing Defense President Muilenburg on mixing business with cycling

Boeing Defense, Space and Security President and CEO Dennis Muilenburg speaks eloquently about defense cycles, but did you know that he is something of a cyclist who typically rides about 100 miles a week?

The give away was the glowing tan he was sporting when speaking at the Reuters Aerospace and Defense Summit.

“I’m an avid bicyclist so I catch some sun while I’m out bicycling,” he said.

Muilenburg doesn’t bike to work but he goes for a spin on the weekend and has a few bicycles parked in his garage. His favorite is a Trek 5900, which other cycling aficianados say is lightweight and speedy.

“That’s my composite frame bike that I use for a lot of my long-distance rides,” Muilenburg says with a smile.

And there is a way to mix business with pleasure, as he explains how he’s incorporated his love for cycling with a Boeing fitness program.

“One of the things we’re doing right now is investing in our people, what we call a people first, people fit program,” Muilenburg says. “Part of that is investing in employee well-being, so quite frequently I travel to a site and do a 20 or 30-mile ride with the team. And then occasionally I do a long distance ride that’s in the 100 to 200 mile range.”

Lockheed CEO Stevens says he learns a thing or two from new generation

Lockheed Martin Corp. CEO Robert Stevens, who turns 59 years old tomorrow, says he learns every day from the new generation at the defense company he heads — although he still doesn’t IM.

The son of a Pennsylvania steelworker who enlisted in the Marines instead of college, later completing  his education on the GI program, says, “I am one of the luckiest people you are going to meet.”

And he revels in the different approaches to solving problems that employees from different generations bring to the table. 

“I go to leadership training every day,” he said at the Reuters Aerospace and Defense Summit.

“And part of the people who train me are the recent college graduates who tell me what their view of the world is. Because it’s not only a different view, the way they solve problems is very different than the way people I went to college with solve problems. It’s fascinating.”

For instance, “their use of technology, the way they communicate with one another, is entirely different,” Stevens says, punctuating his comments with hand gestures.

As part of the Baby Boom generation, Stevens says he’s used to participating in a lot of meetings. “Today’s younger employees, they don’t have a lot of meetings. They’ll use Instant Messaging, I don’t.”

Reuters Aerospace and Defense Summit 2009 Liveblog

As President Barack Obama sends more troops to Afghanistan, and the Pentagon is expected to increase orders of armored trucks, helicopters, ammunition and other weaponry, Reuters specialist journalists are talking to some of the biggest names in the aerospace and defense industries.

Among those who will be speaking to us this coming week: Lockheed Martin CEO Robert Stevens, US Air Force Secretary Michael Donley, and L-3 Communications Holdings CEO Michael Strianese.

AUDIO – Cash is king

And for Boeing Co’s customers, saving cash is becoming increasingly important.

It’s long been one of the great mysteries of the defense game about whether companies that make a lot of the stuff used for defense and security, might be able to ratchet down their pricing when, economically at least, it was a rainy day.

Because now, it’s raining buckets.

Jim Albaugh, head of Boeing’s defense business, said on Wednesday at the annual Reuters Aerospace and Defense Summit that his crew was working with their customers (many of whom are strapped for cash) to create a more affordable line of products.

Now, this is not a President’s Day Sale at Macy’s. Albaugh’s planes and weapons cost in the hundreds of millions of dollars and some programs are in the multibillion-dollar range. So cost-cutting here can mean some pretty big numbers.

But Albaugh went through a number of programs that Boeing is involved in and gave some good examples of how the company was trying to save their customers some cash. He also responded to some of the concerns about the costs of some programs already in place. 

Aero and Defense is the final Reuters summit of the year. In 2008, Reuters has had 33 summits around the globe and have as many or more planned for 2009. Our previous gathering, Reuters Investment Outlook Summit, provided clients with an excellent look at how to manage through what will certainly be a challenging 2009.